Every spring, Europe shuts up shop on an annual slew of holidays.
Easter Monday, Labour Day, Ascension and Whit Monday, all bank holidays that cluster through from March to May.
But economists (and perhaps the odd savings-concerned employer) have long been asking an uncomfortable question: what is the actual price of giving employees paid holiday time?
Denmark offered a blunt answer in 2024. The government scrapped Great Prayer Day — Store Bededag, a nearly 340-year-old Lutheran holiday observed on the fourth Friday after Easter — not because of any theological grievance, but to pay for guns.
Copenhagen estimated the cancellation would generate around 3 billion Danish kroner (€400mn) per year in additional tax revenue, money the government said it needed to push defence spending towards the NATO target of 2% of GDP.
The decision passed parliament in February 2023 and took effect the following year, triggering street protests and a wave of unofficial sick days on what would have been the first cancelled holiday.
It remains the most explicit recent example of a government putting a price on a day off.
Denmark is not the only country to have done so.
Portugal cancelled four public holidays in 2012 — two civilian holidays, Republic Day and Restoration of Independence, and two religious ones, Corpus Christi and All Saints Day — as part of its post-crisis austerity programme, only to reinstate all four in 2016 after the worst of the fiscal adjustment passed.
Economists studying the Portuguese case found it difficult to isolate the effect cleanly, given how deeply embedded the changes were in a broader package of reforms — but the political calculus was the same as Denmark’s: in a tight fiscal environment, a bank holiday looks less like something governments are happy to take on.
What the research says
The sharpest cross-country evidence comes from economists Lucas Rosso and Rodrigo Wagner, whose working paper — cited by the IMF in its 2023 analysis of Denmark’s holiday cancellation — drew on a natural experiment spanning around 200 countries between 2000 and 2019.
When a public holiday falls on a weekend and is not replaced with a substitute day, a country quietly gains a working day that year, creating a quasi-random variation the authors used to isolate the causal effect.
They found a working-day elasticity of GDP of around 0.2 — meaning each additional public holiday foregoes roughly 0.08% of annual output, about half what a simple labour calculation would suggest, because hospitality and tourism spending partially fills the gap.
The effect is sharpest in manufacturing and barely registers in industries like mining or agriculture that keep running regardless.
The numbers add up fast. Germany’s GDP exceeded €4.3 trillion in 2024, making each missed working day worth roughly €3.4 billion in foregone output before any offset.
Smaller economies feel less in absolute terms — but the proportional bite is identical, and they often take more holidays.
Europe’s holiday gap
The variation across EU member states is striking.
According to EURES, the European Employment Services portal run by the European Labour Authority, Lithuania has 15 public holidays this year, alongside Cyprus.
At the other end of the spectrum, Germany has 9 national holidays — though individual federal states add their own.
Denmark, post-Store Bededag, has 10 holidays or one fewer than before 2024 and below what was a continent-wide average of 11.7 days, according to Eurostat.
That gap has real fiscal consequences.
A country operating with 15 holidays rather than nine is, on the Rosso-Wagner framework, forgoing the equivalent of roughly an additional 0.48% of GDP annually — before any consumption offset — compared with its leaner counterpart.
For Lithuania, whose economy was worth around €79 billion in 2024, that translates to a notional output difference of around €360 million a year set against Germany.
The productivity counterargument
Economists are careful not to treat days off as straightforwardly wasteful.
The same IMF paper on Denmark notes that the relationship between working hours and output is non-linear: the longer people work, the less productive each additional hour becomes and a well-rested workforce can sustain higher hourly output across the working week.
The Rosso-Wagner study also found that years with more transitory public holidays are associated with fewer work-related accidents and measurable increases in short-run reported happiness — factors that do not appear in GDP but matter for any complete welfare calculation.
No European government is seriously contemplating abolishing public holidays wholesale.